How Do You Prepare for Disruption?

What would you do if 35% of your loan portfolio vanished? Filene’s report, “Consumer Insights on Autonomous Vehicles as an Impending Market Disruption,” which came out in June, talks about some eye-opening trends and insights around automobile ownership, employment and lending. Are you preparing for the “driverless disruption” or considering its implications to your members?

To help credit unions prepare for an uncertain future with autonomous vehicles, we recently partnered with Bethpage Federal Credit Union on an autonomous vehicle immersion event for credit union professionals. In addition to our own research, we partnered with Sudha Jamthe from Stanford University who is an autonomous vehicle professor (yes, it’s a real job), Corey Ershow from Lyft and Brian Hamilton from CU Direct to present different perspectives on this impending disruption.

Setting the Stage

After getting immersed in all things autonomous, immersion attendees were put in small groups and asked: “What if credit unions thrived in the autonomous vehicle world of 2050, by taking advantage of emerging opportunities to serve consumers, businesses and communities?” Each group used this question as a guide to find potential first steps credit unions could take in achieving that desired future.

Participants leveraged the Strategic Doing framework developed by the Strategic Doing Institute to identify opportunities that could be pursued in 90 days or less, with no approval required for additional resources. This framework first asks groups to identify assets that they collectively have at their disposal. This could be anything – meeting spaces, relationships, financial assets, technologies, etc. – that the group member does not need permission to use. Groups then “link and leverage” assets to form new opportunities that can be pursued by combining different assets. Finally, groups at this event were asked to find their “Big Easy” – low hanging fruit that could be both high impact and achieved with minimal effort.

Assets Analysis

A key step in the Strategic Doing process is to identify assets readily available for participants. The process is about getting things done, not waiting for approval of funding or resources. Groups identified a number of interesting assets that could be deployed. Credit unions should examine these asset examples as inspiration to understand what they, too, could deploy to get moving on a project around autonomous vehicles, or any other project to support their members. Having a good understanding of a group’s assets is critical to understanding what could be done to meet a desired future. Thinking creatively and beyond the obvious when searching for assets is essential.

Here are some examples of assets identified during the group exercise:

• Credit union charter status that provides broad access to the local community (universal charter);
• Strong relationships with local dealerships or within the auto industry;
• Strong relationships with local businesses that have a stake in autonomous vehicles (for Bethpage, relationship with a local hospital was a key asset);
• Strong relationships with local universities and access to research;
• The Filene Research Institute;
• An in-house innovation center (from a technology partner);
• Trust in the credit union’s brand (brand equity);
• Broad network of branches to connect with the community;
• Political connections to understand regulatory shifts or influence policy;
• Organizational framework to implement projects with an “agile” mindset/change plans quickly;
• Financial resources (Note: these were funds a participant had in their organizational budget and could deploy willingly); and
• In-house consumer data (an understanding of members’ needs and capabilities; the ability to conduct research).

Opportunity Identification

The next critical step in the Strategic Doing process is to brainstorm and identify numerous opportunities, or projects, that could be created from the available set of assets. Event participants combined two or more assets in numerous ways to create opportunities that could prepare credit unions for an autonomous vehicle future.

For example, if you combined assets of credit union branches, research on autonomous vehicles and relationships with the auto industry, you can create an opportunity where credit union members are introduced to autonomous vehicles at local branches via an awareness campaign. Why? To help members see the credit union as being a community leader in autonomous vehicles and as a source of future financial support for when autonomous vehicles become mainstream.

Next, participants were asked to find their Big Easy, or low hanging fruit. Each group identified a single opportunity that was easiest to implement but had a high impact relative to other opportunities. Credit unions should examine these example opportunities to inspire action to begin preparing for an autonomous vehicle future.

Here are some examples of “Big Easy” opportunities for credit unions:

• Service for the underserved. Finance autonomous vehicles for charities that fulfill transportation needs of vulnerable populations: The elderly, disabled, etc.
• Car-op. Members collectively purchase an autonomous vehicle and share usage. The vehicle is financed by the credit union.
• Member education campaign. Members come into the credit union’s innovation center to be exposed to the potential of autonomous vehicles. The credit union builds trust in members so they will see the credit union as a future partner with autonomous vehicles.
• Transportation cost comparison calculator. Help members make decisions about which mode of transportation to use based on their needs: Ride sharing (Uber/Lyft), public transportation, personal vehicle, etc.
• Subscription service. Credit union manages a subscription service where members could select and lease an autonomous vehicle for a set period, then exchange for a new vehicle.
• Hospital autonomous partnership. Service a local hospital in two ways: Finance autonomous ambulances to take advantage of safety and manage autonomous vehicle ride sharing for hospital and credit union employees.

Our Conclusions

Event participants leveraged the Strategic Doing framework to answer a seemingly difficult question: How do credit unions take action, even if it is the first step, to prepare for an autonomous vehicle future? Groups were able to generate a multitude of interesting projects that serve as a foundational step in larger future initiatives. By taking action now, participants understood they could learn as they go and refine their efforts along the way. Taking no action was the greatest risk.

For Bethpage specifically, numerous groups identified assets and opportunities that centered around the local hospital. This theme demonstrates that with something as potentially disruptive and complex as autonomous vehicles, relying on critical community relationships could help credit unions take full advantage of emerging opportunities.

Credit unions can prepare for autonomous vehicles. Event attendees demonstrated through this simple exercise that it does not take a significant amount of time or resources to take the first step in preparing for an uncertain future.

Ryan Foss is Managing Director, Innovation for the Filene Research Institute. He can be reached at 952-201-2130 or ryanf@filene.org.

Adam Lee is Incubation Director for the Filene Research Institute. He can be reached at 608-661-3747 or adaml@filene.org.